Friday, November 30, 2007

Shorting the Naz via QID

I posted earlier that I would short 2 units of QQQ 's on a break of 51.20. For those watching the proshares (as you know I do) the 51.20 break below level corresponds with a break above 38.60.


I altered my strategy to be more aggressive and I am long 2 units of the Ultrashort Nasdaq QQQ ticker symbol QID at $38.70. synthetic more aggressive position since the ultra are twice the inverse. So technically this is like having 4 units short of the QQQQ.


To summarize, I am now long 2 units of the Ultrashort Nasdaq QQQ ticker symbol QID @ $38.75 stops at $37.30


Open Positions:
Long 4 units Ultrashort Financials ticker SKF @ $76.45
Long 4 units Ultrashort Real Estate ticker SRS @ $85.28
Long 3 units Currencyshares Japanese Yen ticker FXY @ $86.03
Long 1 unit U.S. oil fund ticker USO @ $53.20
Short 1 unit JC Penney ticker JCP @ $62.90
Short 1 unit Citigroup ticker C @ $44.70
Short 2 unit Amazon ticker AMZN @ $84.18
Short 2 units of Intercontinental Exchange ticker ICE @176.28

Long 2 unts of Ultrashort Nasdaq ticker QID @ 38.80

Charts QQQ's, FXI, Deutsche Bank, Crocs, Nat Gas and Crude.
















Friday Thoughts

I was poking around the e-trade deal with Ken Griffin's Citadel and I am flabbergasted at it. Besides the dilution of existing shareholders is the implications of the mark to market event of the paper on their books. Karl Denninger over at Market Ticker has a great 'pull no punches', as is his style, take on it which I have reprinted below.



E*Trade gets a Guido loan and marks to market their entire ABS paper - at a SEVENTY PERCENT DISCOUNT!I don't think anyone is (yet) understanding the impact of this.Most of E*Trade's portfolio was HELOCs; there were few purchase-money firsts in there.Let's do a bit of math, ok? You know, the stuff they teach you in FOURTH GRADE - math that appears to be totally beyond the capabilities of the equity "cheerleaders" at CNBS!In the last four years approximately $6.5 trillion has been MEW'd out and spent on plasma TVs, exotic vacations and other sorts of drivel. IT IS GONE; it did not go into something of value - it was CONSUMED.


Let's use a conservative assumption that 1/3rd - 33% - came from HELOCs, rather than cash-out purchase mortgages or refinances of existing mortgage paper. Probably reasonable.E*Trade's paper is almost all comprised of this HELOC paper, essentially all of it written in the last three years, and most of it was written to people with significant assets; probably half to their brokerage customers. That is, most of these HELOCs were written to allegedly "good" credit risks.Now let's apply some conservative valuation discounts, given that E*Trade just marked the entire thing to market at 30% of face value.$6.5 trillion X 33% = $2.14 trillion in HELOC paper.30% of original value = a $1.5 trillion dollar DIRECT LOSS on HELOC paper ALONE.Oh, this "subprime" problem is only "subprime" and is just a $100 billion problem eh?


This "mark to market" is a very strong indication that every bank and institution out there with this crap on their balance sheet is going to suffer ocular penetration by a stallion!Guys, this is "The Real Deal."Remember back a few months ago I said that this was a $1-2 trillion dollar problem in terms of direct losses? That the markets were totally ignoring the reality of this? Well, guess what - you just got proof that I'm right.The market is totally ignoring this. We should have tripped the circuit breakers this morning on the Dow, as the figures here are BLATANTLY OBVIOUS.Those who allegedly know how to "invest" and "trade", APPEAR TO HAVE FAILED FOURTH GRADE MATH!


Now you know WHY the malls were empty Saturday and Sunday. Now you know WHY my local Target had nobody waiting to check out on Sunday evening.The money flow has evaporated and what was MEWd out and spent is uncollectable!$100 billion in losses? Ha!That number - on HELOC's alone - is $1.5 TRILLION.No, not in derivatives, swaps, etc - direct, hard, real losses.Oh, and that's just the HELOCs; we haven't gotten to the ALT-A negative-am "purchase" loans yet.



Interesting isnt' it. Mark to market at 30% of face value !



Well that was brief now wasn't it! I am referring to the Mastercard short from yesterday which after looking promising by acting weak in a up market, gapped up thru our stop this morning stopping me out at 204.30. This probably is a deak out but we must respect our rules so we can live to fight(trade) another day. Now I now there is a time to break all rules but this is not one of them in my opinion.


Also stopped out of Sears Holdings (SHLD) at 105.80 as it gapped higher today as well. So we say adios to Mr. Lampert, it has been fun(for us shorts), we wish you well and please don't let this be your Waterloo for discretion is the better part of valor.

Charts coming later. Good trading to you all.

Thursday, November 29, 2007

Charts on IBM, Gold, & Japan Small Cap Fd.








Shorting MasterCard, getting shorter ICE.



Getting short 1 unit of Mastercard ticker MA @ $200.30 into this double top. As my notes indicate I just can't believe Mastercard will escape the credit debacle unscathed. Stops above todays high at $ 203.55

Adding a 2nd unit short to Intercontinental Exchange ticker ICE @ $170.75 Patience has been rewarded....... I think. Good trading to you all.

Open Positions:
Long 4 units Ultrashort Financials ticker SKF @ $76.45
Long 4 units Ultrashort Real Estate ticker SRS @ $85.28
Long 3 units Currencyshares Japanese Yen ticker FXY @ $86.03
Long 1 unit U.S. oil fund ticker USO @ $53.20
Short 1 unit Sears Holdings ticker SHLD @ $154.60
Short 1 unit JC Penney ticker JCP @ $62.90
Short 1 unit Citigroup ticker C @ $44.70
Short 2 unit Amazon ticker AMZN @ $84.18
Short 2 units of Intercontinental Exchange ticker ICE @176.28
Short 1 unit of Mastercard ticker MA @ $200.20

Couple of Items

New computer installed (HP) yesterday severely limited any time for posting yesterday. But back normal today. It sure is nice to have a machine that zips around.

For those with some doubts about the commercial property market and this entire credit mess being contained, here is some pleasure reading for you. Further to that, Blackstone's real estate division saw revenue drop over 40% this year, but just remember. CNBC says everything is okay so its okay. One thing you can be assured of is they will tell you all about how we should have known and seen it coming right after the dust and smoke has disappeared from the mushroom cloud.



Yesterday the young vibrant Erin Burnett went on record proclaiming Citi's dividend won't be cut. I don't know her rationale for that statement other than maybe, the hope method. Eric Sprott from Sprott Asset Mgmt up in Canada penned an excellent read in his November market summary which is well worth you time. The link is above. His comments on GM are outright scary but nobody wants the truth, many can't handle the truth, that's why they resort to name calling and insults to anyone bearing ill news.



Mike Panzner has a great post today, over on his blog Financial Armageddon, on the state of bag holders in this credit mess. Many will line up to sue claiming they were not told by the purveyors of this toxic paper. Do you in your right mind think it is possible to get unbiased, objective advice from an individual or firm who is compensated on whether you buy and place the order. Plenty of people on the net and blogosphere, many listed to the right on my favourites, have been pounding the table warning of the dangers abound. But, alas like the boy who cried wolf, were and are ridiculed and ignored.



I guess a problem is not a problem until its a problem, but the problem with that is by the time everyone knows its a problem its too late to remedy the problem and that problem is now much larger painful problem. (try saying that 3 times fast!)

David Tice and his associates (Doug Noland and Martin Hutchinson whose piece this week is a must read) over at Prudent Bear do excellent work but don't tell anyone you read them or you'll be labeled a pessimist, or perma-bear, etc. More charts later today.

Good trading to you all.

Sears Holdings .... staying short

I have enclosed a longer term view of Sears Holdings. Today's gap is very bad and while it is early in the trading day, it does not bode well going forward. I know there a lots of believers in the Eddie touch. He is a great investor but no one is afforded a free pass in the markets.



Sears is loaded with commercial real estate that everyone thought was the hidden gem. Why not? Banks eagerly lend against property so Sears was the perfect choice for him to leverage his hedge fund operations. As I and others have said, commercial real estate is the next train wreck and Sears is front and center. We are witnessing the effects of de-leveraging. This is not your mothers Sears that's for sure. SHLD may be the stock symbol but if this action doesn't abate, many will wish they had a shield.



I am short (only) 1 unit of Sears @ $154.60. I am moving my stop to $104.60 for no other reason than I am heavily short across the board and don't want to damage my psychological capital, which my good friend (DG), always reminds is more important than the physical kind. Besides sometimes its best to make the cash register ring, just like we did with Hansen Natural (HANS).

Again stop on Sears Holdings (SHLD) now moved to $104.60.

Good trading to you all.

Tuesday, November 27, 2007

New Highs/New Lows

Forgot an item I thought worth noting.

With the Dow up 200 pts and the Nasdaq up 35 compare this to the new high/new low list.

NYSE 17 stocks making 52 week highs , 148 stocks making 52 week lows.

Nasdaq 9 stocks making 52 week highs, 137 stocks making 52 week lows.

Do with this what you will but I can assure you that this statistic is most definitely not the calling card of a healthy market. Good trading to you all.

Charts of ICE, Citi, Barclays, JC Penney & the Yen.

As noted in the chart above adding 1 more unit long of Japanese currencyshares ticker FXY @ $92.25. Now long 4 units @ 87.60













Last Few Days Recap

Back to work from Thanksgiving holiday. Yesterday was a write off due to among other things internet connectivity issues along with a new laptop in the house. My apologies for not posting.

Okay, so Bank of America is now down a cool billion (50%) on their 2 billion investment in Countrywide which doesn't look as shrewd now as it did the day the news was announced and the stock popped to $24. To the people who still buy news and did, I repeat, you get what you deserve. No offence but that's the way it is so don't shoot the messenger.


Abu Dhabi buying a stake in Citigroup. I would love to congratulate them on their purchase except I wonder what is it that the locals know about Citi, who are selling in droves, that the foreigners don't. Just like what did those commercial real estate interests in the late 80's know when they sold that the Japanese didn't? Or the Mexicans back in 94-95'. Answer a hell of a lot more than the overseas interests that's for sure.

Wednesday deteriorated late as we closed. Friday's rally looked to be retail driven on a shortened day but I am not revealing the holy grail to you with that now am I. Of course some hedge fund activity given the low attendance day being ripe for pushing. Yesterday was not able to hang on to Fridays gains. This all speaks of distribution, smart money distributing stock to weak money. Of course they are talking up the market, low PE's good growth, the story is the same, they need to create a market unto which to sell. I can assure you, again, that 100-200 pt swings intra-day are not the hallmark of bottoms as bottoms are formed amidst derision, disdain, and abandonment. This is a market rolling over, the credit markets are much more sensitive and they are flashing red alert. May I suggest, for the umpteenth time, that you pay heed.

Another segment for you from the U.S.'s staunch ally in the middle east Saudi Arabia. Just a reminder of what things are really like over there, just in case Erin Burnett's fawning over the area has you hot and bothered.


Wanted to re-post my open positions as I was stopped out of Uranium Energy, Int'al Coal and Clean Energy. All for small losses. Charts coming later in another post. Again hope you all had a wonderful thanksgiving as we all have much to be thankful for. Good trading to you all.

Open Positions:

Long 4 units Ultrashort Financials ticker SKF @ $76.45
Long 4 units Ultrashort Real Estate ticker SRS @ $85.28
Long 3 units Currencyshares Japanese Yen ticker FXY @ $86.03
Long 1 unit U.S. oil fund ticker USO @ $53.20
Short 1 unit Sears Holdings ticker SHLD @ $154.60
Short 1 unit JC Penney ticker JCP @ $62.90
Short 1 unit Citigroup ticker C @ $44.70
Short 2 unit Amazon ticker AMZN @ $84.18
Short 1 unit of Intercontinental Exchange ticker ICE @ 181.90

Wednesday, November 21, 2007

Charts on Baidu, Oilsands Quest, Uranium Energy, and Clean Energy


Wanted to wish you all a Happy Thanksgiving. Enjoy the holiday as it truly is a time to be thankful. Some charts before the holiday for you to look over. Will try to post Friday if time permits but if not back at my post on Monday.













Tuesday, November 20, 2007

Random Comments

Another correction from a previous post, JC Flowers is actually submitting a bid for Northern Rock, sorry. Flowers pulled the bid from Sallie Mae as I got a few wires crossed as my brain when in use has many problems. Not my first mistake nor will it be my last though I will endeavour to keep them to a minimum.

Yesterday I was watching the interview on CNBC by Erin Burnett with a Sultan from Dubai, (not sure but there may be thousands of them, sultans that is) you remember the one with over 100 companies to his name. I started to write a post yesterday on the subject and stopped midway and deleted it. Just being bearish on stocks doesn't give one the right to be bearish on everything.

I took issue with the cat's take on the U.S. credit markets/housing market and related economic issues which he felt were not a problem. Now this was insightful news for Ms. Burnett, obiviously not wanted to damage her young career, kept the questions soft for sure. Th e problem is many are tuning in and looking for insight.

For those inclined to listen to this expert from Dubai on global economics and events. Just remember this is someone who has not faught in the trenches for what he has. He has not earned his stripes working his way up the chain learning the in's and out's of business. No, he is part of the lucky sperm club. Born into the right family, the the ruling family of the Emirates, the same family that bought or provided seed money to buy/start his 100 + companies.

Ms. Burnett did touch on the subject of worker/management relations, if it can be called that. See, over there if you are a Saudi, Kuwaiti, Emirate, then you immediately qualify for management. No questions asked, because you see, actual, honest hard work and a Saudi, Kuwaiti, or Emirate are as compatible as oil and water. The work is left for the Malaysians, Philipinos, Benghali's or other imports. You know the same ones that double as sex slaves for the masters of the house, but I digress.

Just in case you have forgotten what things are REALLY like in the middle east, this article should provide a quick reminder. I am at a loss for words to describe it properly and after reading it you may be as well.

Good trading to you all.

Charts on Blue Nile, Chipotle, Mastercard and Swiss Re

Yesterday I mentioned Swiss Re lost $1.6 billion, which was incorrect as it should have read 1.06 Billion. My apologies for the error. While on the subject of Swiss Re, I want to touch on something I omitted which was pointed out by Mike Panzner that Swiss Re financial services division is run by former Fed Governor Ross Ferguson. Not trying to pick on Mr. Ferguson as he probably walks his dog, coaches a little league team and is a very respectable citizen.

My point is if you think these financial titans and masters of the universe can save you. I suggest you re-think your allegiances. The fomerly known as 'smart money' has ducked out of Sallie Mae, Cerberus reneging on United Rentals( and now trouble with Chrysler bond sales). The cerebrally unmatched JC Flowers backing out of Northern Rock, simply more empirical evidence for those who require it.

Back to the Swiss Re issue, which carries some significant ramifications so hear me out.

The following quote is noteworthy.

"Since they can make tons of money in reinsurance, what were they doing with all this stuff?" said Tim Dawson, an analyst with Helvea in Geneva who's reviewing his "buy" recommendation.

Back when I was still in the retail brokerage business one of the big product pushes was insured mutual funds. Basically you put a $1 in a mutual on the insurers approved list and you were guaranteed back your $1 in 10yrs or on death of the holder, whichever came first. Initially they let you re-set the deal when the fund went up and the guarantee re-set in 10yrs from that date. Now I believe you can only do it twice per annum. They also let you borrow up to 4x ($1 yours $4 borrowed for an investment of $5) your investment. The Helvea analyst comment of, making money in their core business what are they doing with all this other stuff, is spot and to which I say, Exactly ! The point here is there are lots of financial chickens coming home to roost, and remember this is from conservative Canadian insurance companies, imagine what the aggressive players were doing.

As an aside, the choices of approved mutual funds had some great names but was laughable as the tech bubble was in full blossom, I had the temerity to ask why there were no Japanese equity funds or resource funds available as a choice from the list. The answer, now this from the senior VP in charge of the program nationally was, .... drum role please...... those are too risky !! To quote Jeff Matthews, I am not making this up! Just thought I would share this with you. Good trading to you all.











Monday, November 19, 2007

Monday Evening

Back in August I wrote a piece titled "Evidence of Smart Money" in which I was and had been highly critical of the so-called smart money on Wall St. And taken to task via e-mail by some readers to which I encouraged and appreciated the feedback.

The article today in the NY Times entitled, 'If Buyout Firms Are So Smart, Why Are They So Wrong' was a real laugher for me, I must tell you. All those deals that were so fabulous at the time I guess are just not so fabulous now. The masters of the universe are truly mere mortals after all.

Swiss Re today taking a hit of 1.6 billion which according to Art Cashin was 1 client contract. Art made mention of this so-called containment. For those out there who think this market resilience has been a sign of strength, it has in actuality been a sign of ignorance. The equity markets will now play catch-up with the credit markets.

And for those who feel that this negative news is a contrarian buying opportunity, think again, cause as the saying goes, you ain't seen nothin' yet. The worst is yet to come. I wish it was different and I don't want it to happen but it is what the facts are indicating, unfortunately. To think otherwise is delusional.

Good trading to you all.

Getting Short ICE


Getting a second chance with ICE and its broadening top. Shorting 1 unit at $182 this morning with stop at 186.40 which is slightly above this mornings high. Is shorting a stock which is higher with the market much lower, unusually bright and just plain outright stupid? Well, as the saying goes, you can't tell unless you bet. I will trust my charts and swim with the current of the overall market.

Good trading to you all.








Open Positions:
Long 4 units Ultrashort Financials ticker SKF @ $76.45
Long 4 units Ultrashort Real Estate ticker SRS @ $85.28
Long 3 units Currencyshares Japanese Yen ticker FXY @ $86.03
Long 1 unit U.S. oil fund ticker USO @ $53.20
Short 1 unit Sears Holdings ticker SHLD @ $154.60
Short 1 unit JC Penney ticker JCP @ $62.90
Short 1 unit Citigroup ticker C @ $44.70
Short 2 unit Amazon ticker AMZN @ $84.18
Long 2 units of Uranium Energy ticker UEC @ 4.67
Short 1 unit of Intercontinental Exchange ticker ICE @ 181.90

Sunday, November 18, 2007

Weekend Thoughts

Just a few snippets from the past few days.




The article by Hatzius is sobering because as some of us have forgotten or conveniently ignored is that leverage is a 2 sided beast. It might be best to respect it as such.


I share these tidbits so you can see that my opinions are shaped by some facts and current goings on in the economy. Of course the charts guide me but I need to be aware of the economic and financial landscape around us because as anyone who studies the charts knows they always tell the truth, but sometimes not just right away.


Here is what Charlie Minter and Marty Weiner over at Comstock Partners had to say this week in their commentary,


The stock market has still not come to grips with the chances that the credit turmoil is likely to continue for some time and that the probabilities for a recession are high. Already, the percentage of subprime mortgages that are in default is 16% for those originated in 2005, 12% for 2006 and 8% for the first half of 2007—and these percentages are rising rapidly. Moreover, most of these mortgages have not even been around long enough to reset upward from their original teaser rates.
The big problems are still ahead. Over the next six quarters about $1 trillion of mortgages will be reset to rates that will increase average monthly payments by about $300 a month. About 450,000 households will be facing resets in each of the six quarters. This means an even greater number of defaults that will throw more houses on the market and will result higher inventories and lower prices. It will also significantly increase the amount of toxic mortgages held by various financial institutions resulting in an ever-rising amount of future write-offs. In addition the households still able to make the increased monthly mortgage payments will find themselves with significantly less income to spend on other items, thereby rendering a blow to consumer spending on a macro basis.
We are now far from alone in this negative view of the credit situation. Blackrock CEO Laurence Fink said that announced credit losses at banks and securities firms are $45 billion and will get worse. He stated "Many institutions don’t know what the credit crunch is going to do earnings and their balance sheets." Economist Nouriel Roubini estimated that recognized losses could eventually amount to anywhere from $300-to-$500 billion, meaning that only 10% of the probable losses have so far been recognized. Goldman CEO Lloyd Blankenfein said his firm is still betting that mortgage-backed securities and CDOs will continue to fall, stating that "We continue to be net short on these markets."


I struggle to see how the bulls can dismiss the weight of negative evidence mounting in the credit arena. Does it continue to grow until one day is just cannot be ignored any longer? I don't know the answer but what I do know is that we see the credit problems continuing to spread to other areas of the economy as evidenced by comments from industry leaders in those affected areas. The bulls continue to point to an accommodating Fed with perpetual easing, a robust global economy along with a consumer who continues to spend at every turn. I wish I could buy this ticket but I cannot. Being wrong at this juncture carries extremely heavy ramifications for the bulls.


I was continually told how I "didn't get it" in the tech bubble. I keep thinking back to how it just ended when it ended, there was no pinnacle or climatic event at the time, no ringing of the bell at the top.Though there were plenty of contrarians telling you it was obviously a bubble and caution was in order. Wall St. and the mainstream media wanted to party to continue. After the fact is was as obvious as the nose on their face. Well, if it was so obvious why were they still touting stocks, better yet why were they not net short? Didn't Greenspan tell us bubbles were only identifiable in hindsight. Yeah, right ! and that was our Fed Chairman! Unbelievable. We have just experienced a housing bubble of epic proportions. The ramifications of which are going to be painful and long lasting no matter what the mass media and Wall St. claim to the contrary. In case you need to hear it again,

CAUTION IS IN ORDER AS RISKS ARE GREAT.

CASH IS AND ASSET CLASS AND IS RECOMMENDED.

RETURN OF RATHER THAN RETURN ON IS PARAMOUNT. THE CREDIT MARKETS ARE A LIVING LESSON ON THIS NOW.

SHORTING SHARES WHEN CONDITIONS ARE NEGATIVE IS NOT UNPATRIOTIC AS IT IS NO DIFFERENT THAN BUYING SHARES WHEN CONDITIONS ARE POSITIVE.

Believe me there will be a time to buy shares with both fists but when that time comes, most will be so petrified they won't be able utter the word stock market let alone commit funds to it. I can assure you this event not happen when the indices are 6-8% off of their all time highs but rather scratching multi-decade (yes decade) lows, like commodities (gold/oil) did a few years back.

Remember to let your winners run and cut your losers short. Good trading to you all.

Thursday, November 15, 2007

Quick Rundown

Just a quick rundown. Do you think Larry Fink turned down the Merrill job for a reason? How about fear of the unknown. The rally on MER is a gift to lighten up if you are long or get short if you choose. The story is no where near to being over regarding the financials. The head of Blackstone said it perfectly when he said until this paper is sold and the losses realized we do not have a bottom, something to think about. My guess is they (the financials) will continue to leak the info out in drips and drabs as it is human nature to avoid pain, whether it be physical, psychological or financial. Whenever I screwed up the waiting for dad, in hindsight, now seemed to be much worse than the actual punishment(I grew up in a corporal punishment home). The Chinese say anticipation of death is worse than death itself.

Okay we got some numbers on JC Penney today and surprise, surprise.... news conforms to the tape and the tape says down, lower highs and lower lows. Staying short.



Sears Holdings, more of the same lower highs and lower lows. Everyone was counting on the hidden gem of the real estate. Maybe just maybe it is a lead albatross around their neck. Just a thought. Staying short.



Amazon is a perfect example of the phrase that you learn much more about your stock on reactions. The market was undoubtedly oversold and due for a corrective bounce. So what does AMZN do? Nothing, the hallmark of a waterlogged stock itching to go down. No offence to AMZN longs but the tape tells the story. I will probably regret not being more aggressively short here but suffice to stand pat with only 2 units short.



If you are not looking at the Yen I would suggest you have a good long look at it. It is clearly in bull mode.

Was stopped out of Int'al Coal yesterday for a small loss. I will not lose sight of this and look for a re-entry.

Sitting tight on Citigroup as I also have a healthy short position in financials via long 4 units of SKF.

I am content to sit tight with a 4 unit short position on real estate via long the SRS. The following article talks about residential real estate woes spreading to commercial real estate. Wow, now that's a news flash. I have no idea how anyone could have extrapolated that outcome. Ooops I just stole some material from the upcoming letters to investors over the next few quarters from the numerous Reits and hedge funds up to their eyeballs in real estate.

After selling half of my crude position I am sitting tight with 1 unit content to view it as insurance knowing I will regret being out of crude completely just as I have regretted being out of gold completely on this run. Got to stop thinking so much, not only because it cuts short my profits but also cause it makes my head hurt !

Good trading to you all.

Wednesday, November 14, 2007

Is the Consumer Fine?

I keep hearing that the consumer is fine, everything is all right. These stocks paint a very different picture. You decide for yourself.

Starbucks weekly view(above).

Harley-Davidson weekly view(above).

Brunswick weekly view(above).


Chipotle Mexican Grill, another fad stock chart?
Good trading to you all.



Charts of Amazon, the Yen, Ultrashort Financials & Real Estate












Open Positions:
Long 4 units Ultrashort Financials ticker SKF @ $76.45
Long 4 units Ultrashort Real Estate ticker SRS @ $85.28
Long 3 units Currencyshares Japanese Yen ticker FXY @ $86.03
Long 1 unit U.S. oil fund ticker USO @ $53.20
Short 1 unit Sears Holdings ticker SHLD @ $154.60
Short 1 unit JC Penney ticker JCP @ $62.90
Short 1 unit Citigroup ticker C @ $44.70
Short 2 unit Amazon ticker AMZN @ $84.18
Long 1 unit Int'al Coal ticker ICO @ 5.10
Long 1 unit of Clean Energy ticker CLNE @ 18.85
Long 2 units of Uranium Energy ticker UEC @ 4.67

Good trading to you all.


Trading Update

Adding 1 unit long Ultrashort Financial proshares ticker SKF @ $88.3 to hold 4 units long.

Adding 1 unit long Ultrashort Real Estate proshares ticker SRS @ $96.60 to hold 4 units long also.

Update

Good Morning

I am adding 1 unit short of Amazon ticker AMZN @ $79.90 now holding 2 units short.


Also adding 1 unit long of Japanese Yen currency shares ticker FXY @ $89.60 now holding 3 units long.

Some charts later this morning. Good trading to you all.

Tuesday, November 13, 2007

Charts of Capital One, MasterCard and Deere.

Capital One is one ugly chart, that's for sure. I want to short this bounce but I have enough positions to worry about. Though I wouldn't blame others as this low volume rally screams of being a bounce before the trend reasserts itself. By the way stop sending me pre-approved credit cards twice a month, enough already !

Could a gap down be in the cards here (chart above) ? A lot of traders would be stranded. Watching this very closely.

I know we are supposed to put our rocks in the wettest bags for they break most easily, but yet I am drawn to MasterCard. I just don't see how they can avoid the fate awaiting, rising delinquencies. I know they do all the processing but does that good news not seem to be factored in ? This head and shoulders pattern looks enticing, i hope it's not the hook !

Global market bulls need to take another look at whats happening with their thesis. We (U.S.) are still a major part of global demand and a recession here will be felt no two ways about it.
Good trading to you all.



Monday, November 12, 2007

Charts on Gold, Silver, Kinross, Agnico & Silver Wheaton

I could go into a dissertation on whats going on with gold but suffice to say it is the ultimate liquidity in a world (especially the credit one) that desires it so. Margin clerks don't accept level 3 marked to model/observable imput assets, darn I wish they would have taught me that in MBA school. Regardless, be patient gold is having a good flush after a significant run higher. This is an ongoing long-term bull market in the precious metal. I look to accumulate on this weakness.
Beautiful island reversal here. Classic ! Silver is more volatile than gold hence the cleaner looking island. Shake out dead ahead.
Below are my 3 favourite names in the gold sector which I will be watching like a hawk but being patient knowing full well that these 3 "piano players" can get dragged off to jail with the bad girls when the brothel gets raided. Just such a raid has started.



Open Positions:
Long 3 units Ultrashort Financials ticker SKF @ $72.50 stop $72.50
Long 3 units Ultrashort Real Estate ticker SRS @ $81.50 stop $81.50
Long 2 units Currencyshares Japanese Yen ticker FXY @ $84.25 stop $84.25
Long 1 units U.S. oil fund ticker USO @ $53.20 stop 53.20
Short 1 unit Sears Holdings ticker SHLD @ $154.60 stop $154.6
Short 1 unit JC Penney ticker JCP @ $62.90 stop $62.90
Short 1 unit Citigroup ticker C @ $44.70 stop $44.70
Short 1 unit Amazon ticker AMZN @ $88.45 stop $88.45
Long 1 unit Int'al Coal ticker ICO @ 5.10 stop 4.64
Long 1 unit of Clean Energy ticker CLNE @ 18.85 stop 15.84
Long 2 units of Uranium Energy ticker UEC @ 4.67 stop at 4.16

Uranium Energy Update

Adding another unit of Uranium Energy ticker UEC.

Bought the 2nd unit at $4.74 so now 2 units at an average cost of 4.67 stop at 4.16.

Getting Long Uranium Energy Corp.



We need to be careful with longs here but this tape says up so long 1 unit at $4.60 and stop at $4.16

More charts shortly. Good trading to you all

Sunday, November 11, 2007

Ultrashort Financials/Real Estate & The Yen along with some Thoughts




I was away from my post yesterday so lets start with Bernanke's testimony from Thursday. Ron Paul asked Dr. Ben some tough questions and the answers given were beyond stupefyingly unbelievable, they were outright ignorant. No effect on domestic prices ? Are you kidding me, I was born at night just not last night. This from the same man who told us everything sub prime was contained. Well, if things are so contained, the economy so strong, the dollar weak, crude strong, and gold strong why not rate hikes instead of cuts ??? Can you imagine the bullshit answer we would get for that one!
In his defense, Bernanke is expected to fix this mess(via Greenspan) which of course he cannot as it must run its natural course. Dr. Ben will take the blame which is in some ways unfortunate given Greenspan was responsible for bludgeoning the victim(U.S. economy) and Bernanke is the EMT trying to resuscitate it.
The Fed like multitudes of equity traders know only 1 gear. For the Fed it's cut rates, cut rates, and if that fails cut rates more. Likewise for equity traders its buy long, buy dips, and be bullish buy the dips, the market always goes up !
The housing bubble/ATM driven debt gorged consumption economy is in serious trouble. We are headed for a severe recession if not worse. The CDO/CLO/Sub prime/Alt-A/Derivative situation compounds this situation exponentially as leverage always does, magnifying the good AND the bad. Unfortunately, many in the markets have forgotten this simple lesson.
Ambac, MBIA, MGIC et al have all been put on review by Fitch ratings. For the laypeople a downgrade here means downgrades on all the bonds they guarantee which could create a very negative chain reaction.
The housing crisis is deepening not getting better. We are in the 3-4th inning here. You bottom fishers can keep fishing but until the banks and lenders start dropping like flies and by this I mean bankruptcy or the Feds stepping in steer clear! Rallies in the financials are to be sold !
Between level 3 assets(hmmm)of the big brokers and the possibility that Fannie & Freddie can put back any loan they bought that is found out to contain fraud you have a recipe for an unmitigated disaster. This box of horrors is just opening up. Please ignore the TV pundits and steer clear of the financials, the charts look just awful, not to mention the fundamentals which some say are worse.
I keep hearing CNBC say blood in the streets, time to buy financials. We haven't even begun to see blood, we need banks folding, major banks on the brink with the Feds stepping in, then we can talk blood. We need to see interest rates punitively high. Real bankers not lawyers running banks, the way they were meant to be run(4 C's of credit) then we can talk. Until then no, but my guess is when this unfolds most will be petrified to touch the financials while at the same time loading up on gold at $2500/oz, silver at $75/oz and oil at $225/bbl. Ask yourself the question....would I have bought the banks/financials in 1990 or worse how about 1980? Be honest and to help you, get out a good mirror !
Share buybacks you say. Share buybacks based on debt was and always will be a fraud on the shareholders. Like getting a home equity line to buy more homes. (aaaaaah leverage). I have said this before and will say it again, we are headed down the same road as Japan circa 1990. The only difference being this will be worse due to the amount of leverage and the pervasiveness of derivatives throughout the system.
This is not the end of days by any means just an extremely painful cleansing and for those of you looking for a safe harbor in emerging markets might I suggest you read up on the phrase liquidity as it could go MIA just as you need it most. It tends to happen at the most in-opportune times especially when leveraged money all wants out at the same time. Not because they want to but because they have to. That nasty little fellow called the margin clerk has not been laid off by your brokerage firm and he will not be ignored.
Now I haven't even touched on the world political situation of Turkey, Syria, Iraq, Kurds, Pakistan, etc. You think caution might be in order? Yet all this is occurring and we are barely 5-10% off the all time highs on some indices. So who has it wrong then?
The credit markets?
The currency markets?
The commodity markets?
The equity markets?
It's up to you to decide but I suggest you include some independent, off the beaten path, non-conventional thinking in your analysis. Good trading to you all.



Friday, November 9, 2007

Playing Hookey

I will be away today taking care of some items so no posts today. I will be posting some charts over the weekend.


See you Monday and good trading to you all.





Long 3 units Ultrashort Financials ticker SKF @ $72.50 stop $72.50
Long 3 units Ultrashort Real Estate ticker SRS @ $81.50 stop $81.50
Long 2 units Currencyshares Japanese Yen ticker FXY @ $84.25 stop $84.25
Long 1 units U.S. oil fund ticker USO @ $53.20 stop 53.20
Short 1 unit Sears Holdings ticker SHLD @ $154.60 stop $154.6
Short 1 unit JC Penney ticker JCP @ $62.90 stop $62.90
Short 1 unit Citigroup ticker C @ $44.70 stop $44.70
Short 1 unit Amazon ticker AMZN @ $88.45 stop $88.45
Long 1 unit Int'al Coal ticker ICO @ 5.10 stop 4.64
Long 1 unit of Clean Energy ticker CLNE @ 18.85 stop 15.84

Thursday, November 8, 2007

Holy HANS !!

They say 'the sun's gotta shine on every dog's ass once in a while' and today is kinda that day. Hansen Natural has plunged this morning and rather than over think it so I'm just taking it and running(just wish it was more but ya gotta follow your rules). Sometimes its better to be lucky than good.

I have covered the 1 unit short of HANS at $40.15.

Good trading to you all.

Wednesday, November 7, 2007

ICE - Broadening Top



I was poking around some charts this afternoon and came across this one. Intercontinental Stock Exchange. (ticker ICE) which has a very good looking broadening top. I simply have too many positions on right now and am angry at myself for breaking rules(you always pay for doing this) and not adding to winners(ie JCP, SHLD, C) For those looking for a low risk/high reward trade this may fit the bill. Again, I am passing not out of anything to do with the chart but rather position overload right now.
Good trading to you all.

Wednesday Morning Rant

So lets get started here. GM taking a 39Billion charge. Yeah, everything is okay there right. Heading for bankruptcy my friends. I hate to say it being the son of an auto worker (my day was a toolmaker at Ford Motor) but the facts don't lie. If you can make your way through GM's balance sheet and income statement, you will find that they pay a whopping amount in interest on their debt and this will be the death knell to them. Hope you didn't buy this stock on "the news" of the union agreement. If you did just get out, take your small loss now because it will get larger if you leave it be.

Michael Panzner had a great piece yesterday entitled "The Truth will set you Free" which is a must read on the financials of the financials. You can skip it if you are not into facts and continue to listen to Bob Pisani, and Charlie Gasparino et al for your news. By the way, tune out CNBC when Rick Santelli comes on cause he's another one of those darned realists who rains on the rah rah parade.

For those who have just come out of their cave to stock up on supplies, approximately 50% of the gains in Nasdaq this year have come from 3 stocks Apple, Google and Research in Motion. As terrifying as this should be to any serious student of market internals(breadth) it is lauded as business as usual on pompom tv(CNBC). Google looks to be in a parabolic blow off, which can result on 50% of its move in 10% of its time frame. All 3 will be shorts at some point but not now. Stay away !!

Bill Gross talked about 1 trillion in bad paper, not just sub prime but alt-A and near prime. We all have our reasons and faults but when the biggest bond manager in the world speaks you should at least hear him out.

Get ready for the screaming (again) for interest rate cuts. Yes the same medicine that got us into this morass is the same medicine that will heal us. As preposterous as this sounds it is exactly what all the highly paid pundits, movers and shakers want. You must check your common sense at the door when listening to these guys. I wonder if they have ever thought about what they are saying. Oh yeah, and $97/bbl oil is still good cause it represents a strong economy. I have a news flash for the chief strategists, head economists, and pundits alike, $97/bbl oil represents diminishing supply and ever growing demand, end of story. Unfortunately such a simple answer could never be satisfactory to the higher intellect of those.

Home builder news is bad and continues to be bad. I heard Miller from Legg Mason, who is as fine a fund mgr as there is out there, touting a bottom. He also thinks Countrywide is worth $45/share. Mr. Miller has probably forgotten more about the markets than I could ever dream of knowing but I will respectfully disagree and suggest that Countrywide is finished unless some brilliant financial outfit(B of A) decides to buy them out(averaging their losses).

I saw Ambac (ticker ABK) had a pop yesterday as the company rebutted the negative broker comments (I think it was Morgan). Boy, that should make all the Ambac longs feel much better.

I just want to say to all those trying to pick bottoms in the housing, financial, mortgage, lending, etc arena. Just as markets overshoot to the upside when things are nirvanic, markets will similarly overshoot to the downside when things get depressed. It the nature of the markets, driven by participant emotions. We are no where near that level. Go back and look at the tech darlings to see how far JDSU, Nortel, Cisco, fell. Many would argue far below intrinsic value but what is that value. Many have claimed the homies(home builders) are trading are great price/book levels. My question is what is the CORRECT book on these things. Write down, after write down on land positions has impaired these things and will continue to as/if market conditions worsen. Here is a little clue, when CNBC is running stories and has "experts" on telling you in detail how bad the home builders and ridiculing contrarians for buying them, it will be time to raise your antennae and pay attention. Until then let the apologists continue to cower.

Please read the following article regarding bond insurers. It may help you with your asset allocation decisions going forward.

Good trading to you all.

Short Amazon


Going short 1 unit AMZN this morning @ $88.45. Rally into the underside of broken trend line which also coincides with the 50 day MA. Stop at 91.78 for now.

Good trading to you all.


Long 3 units Ultrashort Financials ticker SKF @ $72.50 stop $72.50
Long 3 units Ultrashort Real Estate ticker SRS @ $81.50 stop $81.50
Long 2 units Currencyshares Japanese Yen ticker FXY @ $84.25 stop $84.25
Long 1 units U.S. oil fund ticker USO @ $53.20 stop 53.20
Short 1 unit Sears Holdings ticker SHLD @ $154.60 stop $154.6
Short 1 unit JC Penney ticker JCP @ $62.90 stop $62.90
Short 1 unit Citigroup ticker C @ $44.70 stop $44.70
Long 1 unit Int'al Coal ticker ICO @ $5.10 stop 4.64
Long 1 unit of Clean Energy ticker CLNE @ $18.85 stop $15.84
Short 1 unit of Hansen Natural ticker HANS @ $59.10 stop $61.38

Short 1 unit Amazon ticker AMZN @ $88.45 stop $91.78

Tuesday, November 6, 2007

Update

Stopped out of Cummins this morning so a $4 loss on an exploratory 1 unit position.



I missed Hansen on the break down thru the bottom of the continuation rectangle. It is now experiencing a low volume rally off the lows of the day which I have as $57.77 and currently trading $59.10


Gone short 1 unit Hansen ticker HANS @ 59.10 with a stop at 61.38



FYI: For more aggressive traders the FXI shows a nice continuation rectangle as well although this one is prone to major gaps and is not for the faint of heart !





Current open positions:


Long 3 units Ultrashort Financials ticker SKF @ $72.50 stop $72.50
Long 3 units Ultrashort Real Estate ticker SRS @ $81.50 stop $81.50
Long 2 units Currencyshares Japanese Yen ticker FXY @ $84.25 stop $84.25
Long 1 units U.S. oil fund ticker USO @ $53.20 stop 53.20
Short 1 unit Sears Holdings ticker SHLD @ $154.60 stop $154.6
Short 1 unit JC Penney ticker JCP @ $62.90 stop $62.90
Short 1 unit Citigroup ticker C @ $44.70 stop $44.70


Long 1 unit Int'al Coal ticker ICO @ 5.10 stop 4.64

Long 1 unit of Clean Energy ticker CLNE @ 18.85 stop 15.84

Short 1 unit of Hansen Natural ticker HANS @ 59.10 stop $61.38



Good trading to you all.

Garmin and Hansen Natural Charts

If you like continuation rectangles the following 2 charts may be right up you alley.